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How to Build Customer Loyalty and Make More Money
By Gregory P. Smith, President, Chart Your Course International


Many businesses are not making as much money as they can. Just because a customer buys your product or uses your service doesn't mean they will come back. Don't view customers as a one-time event. Build a relationship with them. What else do they need? Will they forget you once they walk out the door? A customer represents a continuous revenue stream, not a one time purchase. You want to build a loyal customer not merely a satisfied customer.

Facts:

  • A satisfied customer doesn't mean they are loyal customers
  • We traditionally overspend on new customers instead of developing loyal customers.
  • Forum Corporation showed that up to 40% of the customers in its study who claimed they were satisfied, switched suppliers without hesitation.
  • A Harvard Business Review study reported that 65-85% of customers who switched suppliers said they were satisfied or very satisfied with their former supplier.
  • An average American company loses 15-20% of its customers each year. "Businesses can boost profits 25-85% by increasing customer retention by as little as 5%." (Jill Griffin, author of Customer Loyalty: How to Earn It, How to Keep It )

A Rockefeller Study discovered several reasons why customers defect.

   14 percent left because they did not answer their complaints
   9 percent left because of the competition
   9 percent left because they moved
   68 percent because of no specific reason

Knowing these facts should motivate us to develop a plan to build loyal customers. Here a few innovative ways to improve customer loyalty:

Establish a customer focus group-Invite some of your customers to come to a periodic meeting and provide incentives.

Host an off-site meeting for key customers-Take them to a remote location and provide them with a few classes to help their business. Find out how your company is meeting their needs. Build a relationship.

Talk to Your Front-Line People-Find out what is going on by talking to your staff. Most of the time they know the problems and the solutions.

Collect E-Mail Addresses-Studies show that people are more likely to read and do something with E-mail. Periodically send updates, tips, facts and stories to your client list. Make sure you don't abuse E-mail. Don't spam people, probably once a month is fine.

Avoid Mailing Labels-If you are like me, I sort my mail standing up in front of the trash can. I make one pile to open and the ones with mailing labels usually go unopened into the trash. Hand address or use laser printers on your envelopes.

Use Colorful Postage Stamps-If possible, avoid bulk mailing, metering and "plain Jane" stamps. Colorful stamps get attention and usually get opened.

Discover Your Competition-What you don't know could make a major difference. Talk to your competitors and your competitor's customers. Pizza Hut didn't begin delivering pizzas until Dominoes arrived on the scene.

Steal Ideas-Look at other industries and find out what they do that you can apply to your business. Don't get tunnel vision and only look at similar businesses.

Be Different-Americans love trends and the zany. Do something unusual, funny or maybe even a little strange. Stand out from the crowd. The owners of a successful furniture store in Boston dressed up like the Lone Ranger and Tonto and rode through their parking lot on horses. They also build a state-of-the-art 3D, animated theater inside their store for children. Now parents can drop off their kids and go shopping for furniture. This store has the highest sales per square foot of all furniture stores in America. In keeping with this idea consider:

Free Tickets-All the blockbuster movies opening every weekend provides a great opportunity to send your customers complimentary tickets. Include a personal note on your letterhead with the tickets.

Anniversary Dates-Send a special gift on the anniversary you began doing business with your customer. A calendar with comments like, "On this date you made a difference" or "We couldn't have done this without you."

Shoot This-Send a disposable camera with your logo on it. However, first take a picture of yourself with your message on a placard or sign. So when they develop the film they will have your picture and your message.

Hire a Greenhouse-I know a real estate agent who buys a poinsettia for all of her customers every Christmas. She then mails a gift certificate to them telling them to go to a local greenhouse to pick them up. This way she doesn't have to worry about delivery etc. . .

Capture a Birthday-Write the birthday date on the back of all the business cards you collect. Then send them a card on their birthday.

Surveys-Hire a company or use your employees to call or mail a survey to your customers. Ritz-Carlton hotels and Pizza Hut survey up to 40% of their customers each month. Find out what they liked and what they didn't.

Newsletters-Send out a periodic newsletter with tips and facts. Put information in about your new products or services.

Write a Newspaper Column-Hire a ghost writer or write a weekly, monthly column for a newspaper or trade journal.

Get a Web Site-For as little as $30-$90 a month you can make your service, sell your products 24 hours a day, worldwide. The Wide World Web is not a fad. Your site should be informative, resourceful and attractive. Get an address and put in on all of your promotional materials, business cards and stationary. Call us if you need advice on how to do it and who to use.

Key Customer Representative-Hire or appoint a special employee to do nothing but keep in touch with your special customers. This person can call, visit and send information to these customers. They can let customers know of new services and products you provide. For example Ritz-Carlton Hotels has a special department that tracks and makes a database of customer likes and dislikes. They post this information on a bulletin board outside the employee cafeteria.

Treat your employees the way you want your customers treated. The front-line person is the most important person in your organization. If they feel management cares about them, they will reflect the same respect to your customers. In fact, your employees are your internal customers.



Gregory P. Smith, author of The New Leader, and How to Attract, Keep and Motivate Your Workforce. He speaks at conferences, leads seminars and helps organizations solve problems. He leads an organization called Chart Your Course International located in Conyers, Georgia. Phone him at (770)860-9464 or email greg@chartcourse.com. More information is available at http://www.chartcourse.com.

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